AAVE: Rise or Fall? January 19, 2026 Scenario Analysis

AAVE is trading at $162.35 with a 6.26% drop in the last 24 hours and is in a short-term downtrend. RSI at 44.55 is in the neutral zone, MACD shows a positive histogram while giving a bearish signal below EMA20. At this critical juncture, both bullish and bearish scenarios are possible; a resistance break could trigger bulls, a support break bears. Market participants must prepare for both possibilities.

Current Market Situation

AAVE fluctuated in the $156.83 – $177.30 range and experienced a 6.26% loss with $236.94M volume. The short-term trend is downward; price is trading below EMA20 ($168.39). 14-day RSI at 44.55 is neutral, no oversold/overbought conditions. Although the MACD positive histogram implies bullish momentum, Supertrend is bearish and points to $191.04 resistance. 14 strong levels detected across multiple time frames (MTF): 1D (2 supports/2 resistances), 3D (1S/2R), 1W (3S/4R). This structure indicates a consolidation open to volatility. Price action supported by declining volume could determine a clear direction based on the breakout. Traders should review their positions around $166.92 resistance and $157.31 support.

Scenario 1: Bullish Scenario

How This Scenario Unfolds?

The bullish scenario is triggered by the price breaking above $166.9165 resistance (score: 66/100) with a high-volume candle. This breakout invalidates the short-term bearish structure by crossing EMA20 ($168.39) upward. RSI moving above 50 and MACD histogram expansion provide momentum confirmation. Supertrend turning green (above $191.04) adds further confirmation. Breaking 1W resistances in MTF supports a broader rally. Volume increase is essential; exceeding the current $236M indicates buyers entering. In this scenario, general recovery in the DeFi sector and protocol updates could act as catalysts. If no breakout occurs, the scenario invalidates below $166.92 – traders should use this level as stop-loss for long positions.

Target Levels

First target $191.04 (Supertrend resistance), then main target $217.8024 (score: 66/100, R:R ratio ~1.34 from current level). In more aggressive moves, 1W MTF levels could extend to the $230+ band. Partial profit-taking recommended at each target: 50% at $191, remainder at $217. These levels align with Fibonacci extensions and previous highs; traders should monitor volume and RSI divergences.

Scenario 2: Bearish Scenario

Risk Factors

The bearish scenario begins with a close below $157.3123 support (score: 71/100). This breakdown tests short-term lows ($156.83), shifting momentum in favor of bears. If RSI drops below 40, selling pressure increases, confirmed if MACD histogram turns negative. Supertrend bearish structure strengthens, EMA20 rejection continues. A volume spike (1.5x current) signals panic selling. BTC correlation risk is high; BTC weakness below $92k drags AAVE. MTF 1D/3D support breakdowns create a chain reaction. The scenario invalidates with recovery above $157.31 – use this resistance as trailing stop for short positions.

Target Levels

First target $143.6300 (score: 62/100), main target $110.9846 (score: 22/100, R:R ~1.8). If downside continues, 1W supports drop to $100 band. Profit-taking strategy: 40% at $143, 60% at $111. These levels are strong in volume profiles; monitor RSI below 30 and negative divergences. Risk management is critical: Limit position size to 1-2% of capital.

Which Scenario to Watch?

Main triggers: Close above $166.92 (bull), close below $157.31 (bear). Volume confirmation essential – low-volume breakouts carry fakeout risk. RSI divergence (RSI rising while price falls = bull, opposite = bear), MACD crossover, and EMA20 interaction as secondary signals. Candlestick patterns on daily/4H charts (bullish engulfing vs. bearish breakdown) are decisive. Follow leverage effects from AAVE Spot Analysis and AAVE Futures Analysis pages. Volatility is high; risk invalidation levels in every scenario.

Bitcoin Correlation

AAVE has high correlation with BTC (%0.85+); while BTC dropped 2.43% at $92,770, AAVE declined more sharply. Although BTC is in uptrend, Supertrend is bearish – if $92,403 support breaks, general pressure on altcoins increases, accelerating AAVE below $157. If BTC breaks $94,151 resistance ($96k+), AAVE bullish scenario strengthens. Rising BTC dominance implies altcoin-less rally; $90,946 BTC support could test AAVE at $143. Prioritize BTC levels: Supports ($92.4k, $90.9k) bear signal, resistances ($94.1k, $96.1k) bull signal.

Conclusion and Monitoring Notes

AAVE at a crossroads: $166.92 / $157.31 breakouts determine direction. Prepare equally for both scenarios – long triggers for bull, short protections for bear. Monitor daily volume, RSI/MACD confirmations, and BTC movements. MTF levels (14 strong points) provide roadmap; volatility harbors opportunities. Traders should act according to their risk tolerance, avoid emotional decisions. Weekly closes provide final confirmation.